Monday, March 18, 2013

Monday lower

The Hoot 
Actionable ideas for the busy trader delivered daily right up front
  • Monday lower, medium confidence.
  • ES pivot 1553.75.  Holding below is bearish
  • Rest of the week bias uncertain technically.
  • Monthly outlook: bias higher.
  • ES Fantasy Trader standing aside

Hah - so much for my intuition of a "technically higher" Friday  I'm glad I called it uncertain, as the Dow ended the day down 25 points.  Such are the vagaries of triple-witching day, I guess.  Well the past is done - let's move straight on to Monday now.

The technicals (daily)

Tonight, there's absolutely no point in doing my usual chart run-down because it seems that Atlas shrugged over in Cyprus over the weekend.  This whole bank deposit tax business is a perfect example of two things: first, the limits of technical analysis and second, that when bad things happen, they're usually unexpected.  I mean, Cyprus??  Really?

So right now at 12:50 AM EDT and with ES down a whopping 12 points in just a few hours and continuing lower as I write, I think it's pretty safe to say we're going to see a big gap down at the open Monday morning while everyone runs around like chickens with their heads cut off.  Then when the dust settles and everyone sees that the world is in fact not coming to an end (not just yet anyway) we'll get the inevitable bounce.  The only question is how fast that happens.

Recall the similar hand-wringing over the Italian elections a few weeks ago - more European antics.  That lasted all of what, two days?  But the market's just been looking for an excuse to pull back for a while now and this pseudo-calamity looks like it should fit the bill nicely.  So it could possibly take a few days to bring the indicators back down to oversold.  Should be an interesting week anyway.

Accuracy (daily calls): 

Month     right wrong  no call  conditional  batting   Dow
                                             average  points

January    5      7      6           3        0.533   -101
February   3      4      5           6        0.692    131
March      4      3      3           0        0.571    212

     And the winner is...

Well tonight, it's pretty clearly the bears.  I'm looking for a big gap-down opening, then some retracement but overall lower Monday anyway.

ES Fantasy Trader

Portfolio stats: the account remains at $92,625 after 8 trades (6 for 8 total, 3 for 3 longs, 3 for 5 short) starting from $100,000 on 1/1/13.  Tonight we stand aside mainly because I think most of the damage has already been done.  Timing is, as they say, everything, and this boat sailed at 6 PM on the open.  By 1 AM it's just too late to hop aboard.  I'd not want to go short here and then discover that the market has retraced by the time I get up on Monday.

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